Economics 11/29/10 http://mrmilewski.com

• OBJECTIVE: First day of school administrative stuff.

• I. Welcome Back • II. Attendance• III. Distribution of:

-syllabus, points, and test dates-textbooks-desks, coats, floor, & bags-snow days

• IV. Homework

Last-name, First-name Book #

• Describe condition of the book

Important Stuff• Web-site:• http://mrmilewski.com

• Homework Due Friday 12/3/10

1.) Book covered

2.) Syllabus signed and returned

• Homework Due Monday 12/6/101.) Chapter#1 Homework

2.) Chapter#1 Review

Economics 11/30/10http://mrmilewski.com

• OBJECTIVE: Examine the fundamental economic problem & the factors of production.

• I. Journal #1 pt. A-Read “The Global Economy” p.9-Answer questions (1-3) p.9

• II. Journal #1 pt. B-notes on the fundamental economic problem

• III. Quiz#1• IV. Homework Due Friday!

1.) Book covered2.) Syllabus signed and returned

The Fundamental Economic problem is:

• Scarcity - the condition that results from society not having enough resources to produce all the things people would like to have.

• Economics - the study of how people try to satisfy what appears to be seemingly unlimited & competing wants through the careful use of relatively scarce resources.

Need v. Want

• Need - a basic requirement for survival & includes food, clothing, and shelter.

• Want - a way of expressing need.

Scarcity• Since people have

unlimited wants & limited resources, scarcity leads to choices.1.) What to produce?2.) How to produce?3.) For whom to produce? http://www.autolife.umd.umich.edu/Race/R_Overview/Rouge_Plant.htm

Ford Rouge Plant

The Factors of Production

• LAND – the gifts of nature• LABOR – people with all their efforts & abilities• CAPITAL – the tools, equipment, machinery, and

factories used in the production of goods & services

• ENTREPRENEURS – a risk taker in search of profits who does something new with existing resources

Goods & Services

• Goods - an item that is economically useful or satisfies an economic want

• Services - work that is performed for someone

• Consumer – a person who uses goods & services

Types of goods• Consumer good – intended for final

use by individuals (personal computer, dishwasher)

• Capital good – manufactured goods used to produce other goods (robot welder, oven in a bakery, computer in a H.S.)

• Durable goods – a good intended to last 3 years or more when used on a regular basis (can be both a consumer good or a capital good)

• Nondurable good – a good that lasts less than 3 years (food, notebook, shampoo)

http://www.leaderproduct.com.tw/images/robot.jpg

http://www.nerdgirl.com/sights/data/media/82/Image84.jpg

Goods v. Services• The difference

between goods and services is that a good is tangible, services are not.

http://www.rotten.com/library/culture/indian-call-centers/cs_center2.jpg

Quiz!

http://metrolinx-consult.limehouse.com/events/2004/images/web/122786_1_0.jpg

Economics 12/1/10http://mrmilewski.com

• OBJECTIVE: Examine the paradox of value and the circular flow.

• I. Journal #2 pt. A-Read the “Business Week Newsclip” p.11

-Answer questions (1-2) p.11 • II. Journal #2 pt. B

-notes on wealth, circular flow, and Adam Smith

• III. Homework due Friday!1.) Book covered2.) Syllabus signed and returned

• REMINDER: Chapter#1 Test Monday!

Value, Utility, & Wealth• Paradox of Value – some necessities like

water have little monetary value, whereas some non-necessities, like gold, has a much higher value.

• Scarcity is not enough to create value. It must have utility.

• Utility – the capacity to be useful and provide satisfaction.

Wealth• So, for something to have value it must be scarce

and have utility.• Wealth – the accumulation of those products that

are tangible, scarce, useful, and transferable from one person to another.

• A nations wealth are determined by the total amount of it’s peoples skills (Adam Smith) plus it’s natural resources, capital equipment, stores, houses, and all other tangible assets.

The Circular Flow p.15

• The Market – a location or other mechanism that allows buyers and sellers to exchange a certain economic product.

• Factor Markets – where productive resources are bought and sold.

• Product Markets – where producers sell their goods and services to consumers.

• Read “Profiles in Economics” p.18

-Answer questions (1-2) p. 18

Adam Smith

• He is the father of Modern Economics

• He wrote the Wealth of Nations in 1776

• In it he said that governments need to stay out of the economy as much as possible. laissez-faire

The Invisible Hand• People and business operate in their own self-interest.• Competition acts like an invisible hand which will allocate

resources to ONLY their most productive uses.• Example- if Milewski automotive made cars that exploded

after 3,000 miles nobody would buy these defective autos.• The company would go out of business freeing up the:

-labor used to make the cars-land used in the cars (steel, glass, etc…)-financial capital invested in the company

• Thus, making these factors of production available to other productive and efficient automakers.

Division of Labor

• Division of Labor – work is arranged so individuals do fewer tasks than before.

• Specialization – factors of production perform tasks more efficiently than others.

• Human Capital – the sum of the skills, abilities, health, and motivation of the people.

Economics 12/2/10 http://mrmilewski.com

• OBJECTIVE: Demonstrate mastery of Chapter#1 vocabulary & EBLI Training Day#1.

• I. Administrative Stuff-attendance & distribution of quiz

• II. Quiz #2 – Ch#1 Vocabulary• III. EBLI

-Evidence-Based Literacy Instruction

• NOTICE#1: Homework due Tomorrow!-Syllabus & Bookcover

• NOTICE#2: Homework due Monday!1.) Chapter#1 sections(1-3) Section Review questions2.) Chapter#1 Review

• NOTICE#3: Chapter#1 Test Monday!

Economics 12/3/10 http://mrmilewski.com

• OBJECTIVE: Examine the production possibilities frontier.• I. Journal #3 pt. A

- Read “Profiles in Economics” p.18-Answer questions (1-2) p. 18

• II. Quiz #3• III. Journal #3 pt. B

-notes on trade-offs, opportunity costs, & the PPF• IV. Journal #3 pt.C

-questions on Econ USA episode#1• V . Homework due Monday!

1.) Chapter#1 sections(1-3)-Section Review questions

2.) Chapter#1 Review• NOTICE: Chapter#1 Test Monday!

The Invisible Hand• People and business operate in their own self-interest.• Competition acts like an invisible hand which will allocate

resources to ONLY their most productive uses.• Example- if Milewski automotive made cars that exploded

after 3,000 miles nobody would buy these defective autos.• The company would go out of business freeing up the:

-labor used to make the cars-land used in the cars (steel, glass, etc…)-financial capital invested in the company

• Thus, making these factors of production available to other productive and efficient automakers.

Division of Labor

• Division of Labor – work is arranged so individuals do fewer tasks than before.

• Specialization – factors of production perform tasks more efficiently than others.

• Human Capital – the sum of the skills, abilities, health, and motivation of the people.

Production Possibilities Frontier• PPF is a diagram that

represents various combinations of goods and/or services an economy can produce when all productive resources are fully employed.

• P.23 http://www.harpercollege.edu/mhealy/eco212/lectures/econgrow/econgrow.htm

Trade-offs & Opportunity Costs

• Trade-offs – alternate choices

• Opportunity costs – the cost of the next best alternative use of money, time, or resources when one choice is made rather than another.

Alternate choices in Mr. Milewski’s Class

• Example: “I have three passes for the quarter. If I don’t use them, I get 25 extra credit points. If I use one pass I get 15 extra credit points.”

• Question: What is the opportunity cost of using a pass in Mr. Milewski’s class?

Graphing Choices• Passes Extra Credit

Remaining Lost

3 0

2 10

1 20

0 25

Production Possibilities Frontier• PPF is a diagram that represents various

combinations of goods and/or services an economy can produce when all productive resources are fully employed.

• P.23

PPF

Measuring Opportunity Costs• Opportunity costs are measured in terms of

what you give up.

• The cost of using a pass in Mr. Milewski’s class is the extra credit you lose.

• The cost of increasing gun production is the butter you give up.

Opportunity Cost on the PPF

What the PPF Line Represents• The line of the PPF shows what is possible

if all of the factors of production are fully employed.

• So, if you have unemployment are you on the PPF?

• What could cause the PPF to shift outward?

Economic Growth on the PPF

TINSTAAFL

• There is no such thing as a free lunch

Other terminology:

• Inverse relationship – as one number goes up, the other number goes down

• Direct relationship – as one number goes up, so does the other number.

Econ U.S.A. episode #1• Please answer the following questions:1.) Why were American’s standing in long

lines for gas during the 1970’s?2.) Why did Congress debate the fate of the

Alaskan Wildlife Refuge?3.) How did the United States increase

production of both guns and butter during WWII?

ACT Prep Science 11/29/10 http://mrmilewski.com

• OBJECTIVE: First day of school administrative stuff.

• I. Welcome Back • II. Attendance• III. Distribution of:

-syllabus-desks, coats, floor, & bags-snow days

• IV. Practice Test#1